Worldwide Inflation

Posted by Bull Bear Trader | 4/10/2008 07:48:00 AM | | 0 comments »

Not much of a surprise, but inflation is reaching high levels all across the globe. We are well aware of increases in commodity prices, as a result of higher agriculture products to make alternative energy, and higher energy and raw material costs due to increase global growth. What often gets overlooked is how the weakening dollar is also having an impact on inflation, and not just in the U.S. Since many countries link their currencies to the U.S. dollar, these countries and their economies are forced to feel the impact of U.S. Federal Reserve rate cuts, even if their economies are not slowing. Of course, lower rates and a cheaper currency are just the opposite of what these counties may need when faced with inflationary pressures.